Growing up in a family with a carpenter dad and a realtor mom made for some very abnormal childhood experiences for my siblings and I including; looking at blueprints for fun, regular job site visits, and flipping our first house as teenagers to get money for college. The home industry was built into my DNA so when I married a carpenter it was assumed some flip houses would be in our future.
We started looking at houses almost a year before we actually committed and purchased our first flip house. Flipping houses is the latest trend and we think it can be amazing but not every house is made for it. Before you dive in we wanted to share the criteria we use to determine if a house is a good fit or not. What we look at is:
MONEY
- Purchase price- is it a low price for the area? Do we have funds for down payment? Can we pay cash or do we need to get a loan?
- Budget— what needs to be done, what should be done, what could be done? (There's a difference). How much will each specific job cost? Do we have enough funds to carry the costs for the duration of renovations? Where will the money for all expenses come from? Can we afford to pay for all of those expenses on top of our existing living expenses?
- What have comparable renovated homes sold for in the area? After all work and closing costs are paid for is there any profit? Can we afford to sit on it if it doesn’t sell immediately?
WORK
- Scope of work that needs to be done-is it extensive structural or simply cosmetic?
- Who will be doing the work (is that accounted for in the budget)? Do they have time to take on the project right now?
- Do we want to take on more work ourselves to save costs? Do we have the skills and time to do the work?
TIMELINE
- How long will the project take (not how long you’d LIKE it to take, but actual timeline)
- Do we have the time to take this on right now?
GUT CHECK
- Can you see the potential? Do you walk into the home and picture what it could be?
- Is the timing right (if you’re going through anything big and are just wanting to make a change and take action, re-evaluate motives)
- How does this align with our future goals?
- Does it “feel” right? (notice how this is the absolute last question-lead with logic and numbers and then follow with emotion).
Be mindful of:
- Foundation cracks, faulty wiring, smoked in homes, too much work, mold and asbestos
- Bidding wars for a house that isn’t worth it
- Timeline and budget (no profit-even if the end result would be amazing)
- Emotions overpowering logic (i.e. we want to do this and therefore it’s a good idea)
- Naysayers
If you've done a home renovation we'd love to hear from you and what you think should be added to the list.
Happy Renovating,
-The Miller's